A former editor for Forbes and the Financial Times, Eamonn Fingleton spent 27 years monitoring East Asian economics from a base in Tokyo. In September 1987 he issued the first of several predictions of the Tokyo banking crash and went on in "Blindside," a controversial 1995 analysis that was praised by John Kenneth Galbraith and Bill Clinton, to show that a heedless America was fast losing its formerly vaunted leadership in advanced manufacturing -- and particularly in so-called producers' goods -- to Japan.
His 1999 book "In Praise of Hard Industries: Why Manufacturing, Not the Information Economy, Is the Key to Future Prosperity" anticipated the American Internet stock crash of 2000 and offered an early warning about the abuse of new financial instruments.
In his 2008 book "In the Jaws of the Dragon: America’s Fate in the Coming Era of Chinese Hegemony," he challenged the conventional view that China is converging to Western economic and political values.
His books have been translated into French, Russian, Korean, Japanese, and Chinese. They have been read into the U.S. Senate record and named among the ten best business books of the year by Business Week and Amazon.com.

What Went Wrong at Boeing: My Two Cents

My colleague Steve Denning’s commentary today on Boeing’s 787 problems is on the money in identifying a key managerial wrong turning a decade ago. Boeing decided at the outset to rely on outsourcing for 70 percent of the plane’s manufactured content. As Steve shows at length, this greatly increased the managerial complexity of the project and almost certainly helps explain why the project ended up three years late (with consequent damage not only to Boeing’s reputation but, thanks to contractual penalties, to its immediate bottom line).

Even more troubling, however, has been the long-term cost in weakening Boeing’s competitiveness. This is something I identified in “Boeing, Boeing….Gone,” a cover story for The American Conservative, as far back as 2005. The point is that among the things Boeing has outsourced have been the wings and the wing-box. These are by far the most technologically advanced elements of an airframe and they were outsourced to a Japanese consortium led by Mitsubishi Heavy Industries. Part of the deal was that much of Boeing’s secret wing-building know-how had to be transferred to Japan. The decision was highly controversial with Boeing workers who saw it as a direct threat to their jobs. Outraged at the prone position they were asked to adopt towards their information-gathering Japanese counterparts, they were quoted by author Karl Sabbagh as vulgarly referring to Boeing’s technology-transfer deal as the “open kimono” policy.

Of course, you might think that what was outsourced yesterday can be insourced today. Actually this rarely happens in the real world, at least not where seriously advanced manufacturing is concerned. In this case a key problem is that the 787′s are made of carbon fiber. The learning curve in putting this tricky new material to work has been climbed by Tokyo-based Toray and Mitsubishi, not by Boeing. Unfortunately Boeing seems to have negotiated no effective access to the industrial secrets the Japanese have acquired. In effect Boeing has been left behind by its suppliers and cannot catch up without major costs that, given the relentless pressure for short-term profits in corporate America, will never seem to be worth incurring.

As a practical matter, the Airbus subsidiary of Netherlands-based EADS, will use Japanese-made carbon-fiber for the wings of its next major plane. The net effect is that the Japanese have suddenly bootstrapped themselves to leadership in the jetliner industry. (It should be noted that Japan’s aggregate contribution to the 787 comes to 30 percent, the same as that of the United States.) All this is the more piquant because Mitsubishi seems to be planning in the long run to enter the fray as a direct competitor to Boeing and Airbus in building full-size commercial jetliners. Already Mitsubishi is working with Toyota Motor to launch a 90-seat regional jetliner in 2017.

As for the immediate problem of getting the 787 back into the air, the news this morning is that overcharging seems to have been ruled out as the cause of the battery problems at the center of the crisis. Meanwhile Securaplane, a subsidiary of Britain’s Meggitt, which makes chargers for the 787, has announced it is cooperating in the effort to find the source of the problem.

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So, it comes down to basic executive decisions on outsourcing the majority of manufacturing. That says alot about US manufacturing over the last 20 years, and that of course says alot about the US economy, as well. Having worked in quality for over 30 years, I certainly can see that relationship, but it is the executive decisions that seem most relevant here to me. Those factors often go unreported, even though they are so basic to some of our current problems.

The A350 XWB wings are to be manufactured at Airbus’ Broughton (UK) site. http://www.airbus.com/presscentre/pressreleases/press-release-detail/detail/first-a350-xwb-wing-arrives-in-toulouse-for-ground-tests/

A further reply to Richard Fletcher: The process of making flaw-free carbon fiber is extremely advanced (the emphasis here is on flaw-free). As far as I am aware the only sources of commercial quantities of such material are in Japan. Over to you.

This is the ongoing 1% vs 99% issue. The 1% see no disadvantage to their interests — no threats to their “jobs” as it were, and more income for them. They are globalists. They are the ones who are claimed by their toadies that if they are taxed more they would leave the country.

They have no loyalty to the US, its economy, its human intellectual capital, or the overall health in the US.

I have never understood how outsourcing benefits America or Americans. And yet, we watch industry after industry do it and suffer the consequences.

As with any new aircraft the dependability is like a bell curve. At first there are a lot of technical glitches and as Pilots and Mechanics learn how to deal with them reliability improves. The more advanced the aircraft the more difficult it is for the flight crew to collectively translate the information to the maintenance tech what he sees is wrong. Then there are no real brain trusts for the maintenance tech to go to in order to interpret what is wrong. Sure they have manuals and it can take hours to search and find the answer. Reboot becomes the common term. Which basically means, shut it all down and start over.

The issue here in is due to a giant cultural change. The aircraft is culturally different than anything anyone has flown or worked on before. Outsourced parts are not proven and may often have to be remade to a higher quality and standard.

As the bell curve of reliability continues and peaks the aircraft and all of the support will eventually be at its peak. As parts wear out the curve will descend and it will be up to the companies to decide how they will support the fleet or will they run to the next big thing and start the cycle over.

I for one believe in the basics. Do not keep trying to reinvent the wheel if what is working for you is at nearly 100 percent reliability. This aircraft does not come from the traditional Boeing culture and that will be its greatest challenge.

This’ll start a fistfight; try and disprove This: After a week of stories on the battery, no one asks about the charger? Well, actually, you haven’t been told one shred of a tenth of the story. A whistleblower lawsuit extensively documents the Boeing 787 charging system’s explosive history and fiery birth at Securaplane. Ponder the following-and try not to spill your coffee… *Securaplane is the company you don’t hear about, despite their obvious centrality to the story about the battery and charging system; they MAKE the charger.

*From the last sentence of the article: ” Meanwhile Securaplane, a subsidiary of Britain’s Meggitt, which makes chargers for the 787, has announced it is cooperating in the effort to find the source of the problem.” Really? Google “ Securaplane whistleblower lawsuit’ sometime.

*A web search for “Securaplane whistleblower” or ‘Securaplane fire’ delivers an avalanche of documentation, yet the media has observed a near surgical avoidance of any mention of the company at all, although the battery manufacturer, with over 40 satellites orbiting with their hardware, has been widely panned.

The Securaplane story got its first legs in Australia when aviation journalist Ben Sandilands ran it last week. Sandilands, a highly respected and astute expert on the industry did his due diligence and vetted the details I relayed to him-his article is worth looking up: http://blogs.crikey.com.au/planetalking/2013/01/17/qantas-hopes-for-a-fast-dreamliner-fix-are-fading/?wpmp_switcher=mobile

In my discussions with engineers from NASA and a number of aircraft manufacturers this weekend, all expressed surprise that the wrongdoing exposed in the whistleblower lawsuit were not common knowledge-they had not heard of it until now either.

Securaplane’s denial mechanism needs little help; the smoke from their devastating 2006 fire casts a pall over the 787′s electrical system and their role in Boeing certifying the aircraft despite widely known faults and a trail of criminal action up to and including manipulation of the FAA.

Maybe it’s time for the SEC to get involved, since neither the media nor the rest of the government have so far shown the acumen to accomplish a simple web search.

During the Securaplane whistleblower laswuit, a Securaplane employee at one point testified that records were unavailable to the judge because the admin section of their facility, had, like the engineering section, ‘burned to the ground’. All this from testing a Boeing 787 battery charging system and ignoring the protests of the technician who knew the outcome would be gruesome. The three alarm fire itself is hard to research; one local news organization which covered it claims that their servers had dumped all records, stories and photos, videos from a period that brackets that time to somewhere in 2009. How’s your confidence in trusted agencies, companies and officials doing now?

I look at a even bigger picture of American companies as a whole selling out America because of the bottom line. The question remains I guess if American industry can survive at all if it has to make these kind of deals just to make a product. This is not just a Boeing issues as we have seen similar problems in the auto industry, computer industry and many others. Apple comes to mind as a American company who cannot make much in the US without sacraficing profits. I basically feel that the more you out source a complicated product like a jet or a auto. The more your expose yourself to companies who may also be looking at margins. The problem is that inferior parts on a automobile are bad enough. On a aircraft its much worse.